Chapter 4 Flashcards
1
Q
Willingness to pay
A
Max price at which a person will buy that good
2
Q
Economic Signals
A
Any piece of information that helps ppl make better economic decisions
3
Q
Property rights
A
Rights of owners of valuable items to dispose of items as they choose
4
Q
How changing prices affect producer surplus
A
Fall in one causes rise in the other
5
Q
Individual Producer surplus
A
Net gain to an individual seller from selling a good
Price received - cost = producer surplus
6
Q
Cost
A
Lowest price at which a potential seller is willing to sell
7
Q
Consumer Surplus
A
Refers to both individual and total surplus
-area below Demand Curve but above price
